FTX, once a prominent player in the crypto exchange sector, has received court approval to proceed with a liquidation plan that will reimburse customers in cash, despite objections from some creditors seeking higher repayments linked to recent cryptocurrency price increases. The approval, granted by US Bankruptcy Judge John Dorsey, allows FTX to initiate voting on its wind-down proposal, which aims to settle outstanding claims following its collapse in November 2022.
The bankruptcy proceedings highlight FTX's efforts to recover and distribute up to $16 billion, including $12 billion in cash, to repay approximately 9 million customers affected by the exchange's demise. However, discontent among creditors persists, with some arguing that FTX's repayment plan undervalues assets deposited at the time of bankruptcy, such as bitcoin and ethereum. Despite assurances from FTX CEO John Ray that cash payments are the fairest method given the varied nature of customer holdings, disputes continue, with certain creditors pursuing legal action outside of bankruptcy court to contest FTX's handling of customer deposits. FTX aims to conclude creditor voting by August 16, 2024, with final approval of its wind-down plan scheduled for October 7, 2024, marking a critical juncture in the resolution of one of the largest collapses in the cryptocurrency exchange industry.
